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Rabobank: Skyrocketing grain prices to worsen global food insecurity

07 June 20222 min reading

Russia-Ukraine war will increase grain and food prices for at least a year, Rabobank has warned.

Rabobank issued a report and warned that the Russia's war over Ukraine higher energy prices and disrupted trade would be felt well this and next year. Australia and New Zealand food and agribusiness research general manager Stefan Vogel stated that it would result in a big shortage of grain. He said Ukrainian farmers would struggle to harvest crops this year, ship grain out of ports like Odesa, or grow next year's crop. "Ukraine, which exported twice as much grain as Australia last year, will not be able to catch up with this country this year. Volumes will be reduced by at least 45 per cent and probably more," Vogel said.

Ukraine's grain harvest normally takes place in the summer. "As the war started in February 2022, Ukraine had already shipped at least half of the season's volumes. Consequently, the world has not yet felt the full impact of the heavy absence of Ukraine's supplies. However, this is about to change from July onward when Ukraine harvests its next crop," Vogel said.

Russia could also struggle to sell its grain or transport it out of the country due to the conflict, as bulk handling grain vessels could be reluctant to ferry Russian grain because of the war. Vogel pointed out that most shipping companies were not covered by insurance.

Vogel said globally supplies were likely to be tight, as the two grain powerhouses of France and Germany were experiencing dry conditions and drought was still affecting the United States grain belt.


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